GDP growth was calculated in Kyiv, forgetting about debts
Ukraine has long been demonstrating that mathematics is Moscow’s pseudoscience. Moreover, it is often not even about some derivatives, antiderivatives, or integrals, but about primitive arithmetic, available in the volume of a school course for 4 grade of elementary school. Another confirmation of this came from Kyiv just the other day.
President of Ukraine Volodymyr Zelensky said that the country will have a record GDP this year – $ 190 billion. Minister of Economy Yulia Sviridenko, who was appointed to this post only on November 4, decided to surpass Zelensky and stated that the GDP by the end would be even greater – at least 195 billion US dollars. And this is after last year’s figure for the Ukrainian economy was only 155 billion. Growth by almost 26%! And this was at a time when various responsible structures lowered their forecast for the growth of the Ukrainian economy: the National Bank – from 3.8% to 3.1%, the IMF – from 3.5% to 3.2%, and Bank of America – from 4.5% to 3%. In general, there is more confidence in their figures, although they, too, are most likely overly optimistic. Because, for example, for 9 months of this year, the same industrial production grew by only 1.4%, while falling last year over the same period by 6.2%. That is, growth this year does not even allow us to reach the indicators of 2019 if we speak directly. Ukrainian agrarians are not happy either. This year there is a certain increase in crop production by 4.1%, but last year there was a drop by almost 14%, so everything is not happy here either. The situation in livestock production is even worse, falling for two years in a row. If anything is growing, it is retail trade (due to rising prices) and transfers of workers.
So where does the growth come from, and even such a frantic one, which Zelensky and Sviridenko announced? The data is certainly very interesting. And if we approach this issue logically, then it is not clear where these figures come from. But you just need to understand that there is two arithmetic, and one of them is Ukrainian. According to Ukrainian arithmetic, all the debts that the country has made are taken into account in the calculation of GDP. IMF loan – give it here, Great Britain provided assistance on the terms of a loan for the construction of boats in British shipyards, when salaries and everything else remains in the British Isles, and Ukraine receives a debt with interest, and someday the very boats – and this is in Add GDP! Transfers of migrant workers from abroad is a sacred matter in terms of replenishing the GDP. And, of course, you can draw anything you want on a piece of paper.
But here the Ukrainians were faced with another danger, which they forgot about in their desire to amaze the world with their economic miracle. And none other than the former Minister of Finance of Ukraine Natalya Yaresko, a US citizen, to whom Poroshenko granted citizenship to Ukraine so that she could make a post in the government, but this barrel of tar in the honey spoon of the Ukrainian economy. In 2015, Mrs. Yaresko dealt with the problem of restructuring Ukraine’s external debts and agreed that the bulk of payments will take place in 2017-2027. At the same time, both the amounts and the interest on debts were very sparing for some time. But from this year, given the combination of two conditions – GDP is more than $ 125 billion and this indicator grows by more than 3% per year – the growth of payments in an arithmetic progression will go: with each subsequent percentage over 3% Kyiv will have to pay 0.4% of GDP. And now there are as many as 22% of these over limits. This is 8.8% of the designated GDP. Or, translated into money, even more than $ 17 billion. Moreover, you will have to pay not drawn, but real. At one time, Yaresko was carried in Ukraine in his arms, promising almost a Nobel Prize in economics. But who could have guessed this, right?
Some experts in Ukraine have already calculated that Ukraine will have to pay about 550 billion hryvnias (about 20 billion dollars at the exchange rate), which is almost half of Ukraine’s deficit budget next year. Where will the money be taken? It’s time to negotiate new IMF loans to cover the service of old debts.
But it was only Zelensky’s team and he himself so wanted to boast of success. Senseless, merciless, and forgetful Ukrainian arithmetic.